The Competition & Markets Authority (CMA) has recently launched its “Small Print, Big Difference” campaign which encourages travel businesses to be upfront and clear with consumer customers.
Although the campaign has been launched with a holiday and travel focus (following the CMA’s investigation into online hotel booking websites), and is supported by ABTA, many of the requirements will also apply to other consumer facing businesses.
A question of fairness
The Consumer Rights Act 2015 requires that contract terms and notices used by businesses in transactions with consumers are fair. Generally, contract terms are unfair if they put the customer at an unfair disadvantage.
If a term isn’t fair, it will not be legally binding on a customer. Businesses also risk the CMA and other bodies taking enforcement action to stop the use of a term or notice which is considered unfair.The CMA campaign links to a series of at-a-glance guides that provide an introduction to the common types of terms where unfairness can arise:
- Deposits, advance payments and cancellations. Be clear and upfront about any deposits, advance payments and cancellation charges. Provide details of when these are required and why, and ensure that the terms comply with the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013.
- Cancelling a contracts – when and how. Terms should not give a business excessive rights to cancel a contract and a customer should not be unduly restricted should they wish to do the same.
- Excessive changes and financial sanctions. Be clear and upfront about any charges customers have to pay if they are at fault and how these are determined.
- Responsibly if things go wrong (limiting or excluding liability). Terms which allow you to remove or limit your liability to customers when you are at fault and things go wrong are likely to be unfair and there are some things you simply can’t restrict your liability for. Terms are more likely to be fair if liability for loss is excluded only where you are not at fault.
- Changing the terms of a contract (variation clauses). Terms are more likely to be fair if you explain what, when and how a contract may change and you also give the customer reasonable notice and a right to freely cancel.
- Subscriptions and automatic rollover. Be clear and up-front with your customers about how and when their contract will renew. Provide a reminder of what reasonable steps to take if they want to stop the renewal.
- Other terms that may be unfair. Be wary of terms that bind customers to hidden terms, give the business the right of final decision, restrict or prevent a customer from taking legal action, exclude or undermine special rights or make the customer bear inappropriate risk.
The latest campaign
The CMA advocates that having clear and fair terms in consumer contracts will save businesses time, help prevent disputes and reputational damage and protect businesses if something goes wrong, and is inviting travel and holiday businesses in particular, to “check-in” on their terms and conditions to ensure they are fair and transparent.